I have been saying for about a year now that Health Insurance is going to be the next housing bubble. It simply can’t continue to grow at the rate it has, currently somewhere around 17%, with its current valuation of being 16% of the GDP. Well, the New York Times has an article by Jenny Anderson titled “Wall Street Pursues Profit in Bundles of Life Insurance” which states that Wall Street is seeking to insure insurance policies like they did with the housing insurance policies called mortgages. Securitizing them into tranches and selling them off in various levels of risk. Again, exactly like the housing bubble. The moment something defaults, you’ll get a cascade. When an entire company exists to perform such securitization, you’ll end up with another AIG, Bear Stearns, etc.
The ethics of securitization based on the calculated risk of someone living longer is something I would expect from some race of people newly discovered during a Star Trek episode, not right here in the conducting of US business. But, we’ve seen worse.
- The risk is if someone lives too long due to technological innovation.
There are implications of securing money with money. We haven’t learned our lesson.
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